THE FINANCIAL Regulator has advised mortgage lenders not to “harass or intimidate” consumers falling into arrears.
While communication with customers is important in arrears situations, mortgage providers and their collection teams should ensure that the level of contact is “balanced”, the regulator said yesterday.
A themed inspection of the handling of mortgage arrears carried out in 2009 uncovered a number of regulatory concerns, including the high level of contact being made by certain institutions when dealing with customers in arrears.
This problem was found to be more pronounced among non-deposit-taking lenders than with traditional banks and building societies.
The inspection also revealed that borrowers with non-traditional lenders were likely to incur higher arrears-related charges such as management fees and charges for letters issued in relation to arrears. The regulator recently wrote to all mortgage lenders to request that they impose arrears charges only where they can be “justified”, and to handle such cases “sympathetically”.
At the end of December 2009, 28,603 mortgages were found to have been in arrears for more than 90 days.
The Irish Banking Federation (IBF) said yesterday that mainstream banks and building societies were fully committed to working constructively with customers who were experiencing “genuine” difficulty with repayments.